Suppose that four land owners,A,B,C,and D,own adjacent lots.Recently,a pool of oil was discovered that is under all four lots but does not extend beyond the four lots.Below is information on the relationship between number of oil wells,output per well and revenue per well.
-Refer to the information above.When the marginal cost of drilling a well is $94,each land owner drills __________ wells and experiences an output of __________ barrels of oil per day per well.
A) 8;37
B) 2;95
C) 1;100
D) 2;an unknown number of
E) 8;95

Question

Suppose that four land owners,A,B,C,and D,own adjacent lots.Recently,a pool of oil was discovered that is under all four lots but does not extend beyond the four lots.Below is information on the relationship between number of oil wells,output per well and revenue per well. 
-Refer to the information above.When the marginal cost of drilling a well is $94,each land owner drills __________ wells and experiences an output of __________ barrels of oil per day per well.
A) 8;37 
B) 2;95 
C) 1;100 
D) 2;an unknown number of 
E) 8;95

Quizplus · Accepted Answer

The marginal cost of drilling a well is $94, so the land owner will drill 8 wells (since the marginal cost is equal to the price of drilling a well). Each well will produce 37 barrels of oil per day (since the output is equal to the marginal cost divided by the price of oil).

Suppose That Four Land Owners,A,B,C,and D,own Adjacent Lots